Taxes and the Rich after the Election

Back in August we offered here a long, fact-based discussion of taxes paid by income groups.  That material, from Congressional Budget Office tabulations, shows that the top 20% of income earners paid 87.5% of total federal income taxes from 2002 to 2009.  This portion, covering the years following the Bush tax cuts, was a larger share than the 78.8% of taxes that group paid during the Clinton years when tax rates were higher.

Now, I know this fact, and you readers have lately been apprised of it.  But most people don't know it or evidently believe that what the "rich" pay is not enough, whatever share it is.  A Pew Research Center survey taken in late July found that 58% of Americans believe that "upper income" households pay less than their "fair share".  Even 52% of "upper income" people believe their own group pays "too little".  The survey lets participants place themselves into income groupings, "upper", "lower" and "middle", and define their own sense of "fair share" or "too little" or "too much".  So all of this is subjective and meant to indicate people's qualitative impression.  Only 26% of all participants said that upper income people pay an appropriate amount of taxes.[1]

We found this survey report by Googling on the phrase "resenting the rich".  We've been working in recent months on issues of inequality and the American middle class, and we hope to have a great deal to offer about that sensitive topic in weeks to come.  It has taken on greater importance since the Presidential Election, which seems to have turned noticeably on questions of inequality and class differences, among other factors.  The Pew survey shows that, among numerous other aspects of people's impressions, they believe the rich are more likely to be greedy (55%) and less likely to be honest (34% versus just 12% who say the rich are more likely to be honest).  What an indictment!  What a difference from a generation or so ago, when the rich were held in higher regard.  We'll talk more on this in subsequent articles that explore demographics, jobs, the financial sector and other possible sources of change in social position and attitudes toward it.

Most immediately, the issue of taxes and the rich will impact the work in Washington on the fiscal cliff, the huge federal budget deadline we talked to you about just three weeks ago.  President Obama and House Speaker Boehner both commented Friday, November 9, on this fiscal cliff, and the President announced meetings this coming week with Congressional leaders and business leaders to begin the necessarily fast work to meet the year-end deadline.  Today,  as we prepared these remarks, we looked at various press reports of Obama's and Boehner's statements.  The Wall Street Journal's account sounds fairly conciliatory.  According to them[2], both gentlemen seem to say that rates on high-end taxpayers can stay the same if deductions for them are cut so they wind up paying more tax. That would be constructive, if it is really so.  But we watched Obama's public statement Friday afternoon live in front of an audience in the White House East Room, and he sounded to us pretty staunch in raising rates for those with incomes above $250,000.  A Los Angeles Times story described the scene that way as well.[3]

So we're still on tenterhooks.  And this tax item is only one in a list of other taxes and spending features that must be dealt with.  Will Washington gets its act together over this?  One can hope, but right now, it still has to be just hope.

________________________ 

[1]Kim Parker, "Yes, the Rich Are Different".  Pew Research Center: Pew Social & Demographic Trends.  http://www.pewsocialtrends.org/2012/08/27/yes-the-rich-are-different .  Published August 27, 2012.  Accessed November 9, 2012.

[2] http://online.wsj.com/article/SB10001424127887324439804578108971200674876.html   Accessed November 10, 2012.

[3] http://www.latimes.com/news/opinion/opinion-la/la-ol-obama-talks-tough-on-fiscal-cliff-20121109,0,4421577.story . Accessed November 10, 2012.